Rise in state pension age 'will hit people on low incomes hardest'

Published on Thursday 5 August 2010 13:23

FLAWS in the government's plans to raise the state pension age as soon as 2015 mean those on low incomes will be hit the hardest by the change, it has been claimed.

The government wants to bring forward the one-year increase in the retirement age for men to 2016 or even 2015, because of rising life expectancy. But the wrong measure of life expectancy is being used in its assessment of how much longer people should work for, according to longevity experts Club Vita.

It warns that by using the average life expectancy as the basis for its calculations, the Department of Work and Pensions (DWP) is ignoring the primary purpose of the state pension - to prevent poverty in old age. Instead Club Vita calls on the DWP to use "healthy life expectancy" to work out how much longer people should continue to work.

Steven Baxter, longevity consultant at Club Vita, said people on lower incomes and with unhealthy lifestyles typically die ten years earlier than the most advantaged groups of society.

"By using life expectancy at the national level to inform the acceleration of planned changes to the state pension age these disparities will be ignored. Ultimately, lower income individuals, who are most reliant on the state pension, would stand to lose the most.

"We would urge the DWP to give greater focus to life expectancies that will accurately depict peoples' ability to work later in life."

The government's plans to accelerate the increase in the state pension age have also come under fire from the National Association of Pension Funds which claimed that a 2016 increase would be "too hasty" and not give people enough time to prepare for retirement. It wants the pensionable age to increase to 66 by 2020 for men and women.